Type 2 diabetes, which usually arises in adulthood and often stems from poor diet, lack of exercise and obesity - accounts for more than 90 per cent of diabetes cases.
Timothy Kieffer, a professor in the department of cellular and physiological sciences at the University of British Columbia, and scientists from BetaLogics simulated Type 2 diabetes in mice by putting them on a high-fat, high-calorie diet for several weeks.
Kieffer's team then surgically implanted pancreatic-like cells that had been grown in the laboratory from human stem cells.
In contrast, a group of mice with simulated Type 2 diabetes that received the drugs but not the transplants remained glucose-intolerant.
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"Being able to reduce spikes in blood sugar levels is important because evidence suggests it's those spikes that do a lot of the damage - increasing risks for blindness, heart attack, and kidney failure," said Kieffer, a member of UBC's Life Sciences Institute.
"Their weight loss was intriguing, because some of the common diabetes therapies often lead to weight gain. We need to do more studies to understand how the cell transplants lead to weight loss," Kieffer said.
The study was published in the journal Stem Cell Reports.